Which of the following supply shocks will shift the long-run aggregate supply curve outward?
A)An increase in business taxes
B)An increase in gasoline taxes
C)An increase in the cost of raw materials
D)An increase in the amount and cost of government regulation
E)An increase in agricultural output

Question

Quizplus · Accepted Answer

An increase in agricultural output will lead to a greater supply of goods and services in the economy, shifting the long-run aggregate supply curve outward. The other choices (A, B, C, and D) all involve increases in costs for businesses, which will shift the long-run aggregate supply curve inward.

Which of the Following Supply Shocks Will Shift the Long-Run